Flour Mill Project

1

Institute of Management Sciences

Feasibility ReportOn

Roller Flour Mills

Nida Mohammad, Khalid khan, Tamoor Shah, Waqas Ahmed, Saadat ali, Nida Ishfaque

KHAIBER Flour Mills (Pvt.) Ltd.Takhtani By Pass,

Quetta.

Nida Mohammad Khan Achakzai Tamoor Shah Shamail KakarWaqas Ahmed Qureshi Khalid KhanSaadat AliNida Ishfaque

2

TABLE OF CONTENTS

-----------------------------------------------------------------------------------------------------------S# CONTENTS PAGE#-----------------------------------------------------------------------------------------------------------

PART A : GENERAL

SUMMARY OF THE PROJECT 4

LAND AND BULIDING 5

PLANT AND MACHINERY 6

RAW MATERIAL 7

WATER AND POWER 7

MARKET PROJECTS 8

DEMAND AND SUPPLY GAP 8

CONCLUSION 9

PART B ; TECHNICAL

OBJECTIVES OF MILLING 10

WHEAT OF THE WORLD 11

WHEAT TYPE 11

DESCRIPTION OF WORKING PROCESSING 12

PART C : FINAJNCIAL & COSTS

FINANCIAL PROJECTIONS 14

ASSUMPTION UNDERLYINGEARNING & EXPENSES FORECAST 15

RAW MATERIAL 16

PACKING MATERIAL 17

MANPOWER 18


3

UTILITIES 19

OTHER MANUFACTURING OVERHEADS 19

STATEMENT OF DEPRECIATION 20

CLOSING INVENTORY 20

OPERATING EXPENSES 21

NET INITIAL WORKING CAPITAL 22

COST OF GOODS SOLD 23

FORECECAST OF INCOME STATEMENT 24

FORECAST OF BALANCE SHEET 30

FORECAST STATEMENT OF CHANGESIN FINANCIAL POSITION 32

ECONOMIC EVALUATION 34

BREAK EVEN ANALYSIS 35


4

SUMMARY OF THE PROJECT

Name of the project: Flour Mulling

Name of the Project: KHAIBER FLOUR MILLS (PVT) Ltd

ADDRESS: Takhtani by pass, Quetta.

Corporate Setup: Privated Limited Compay

Directors/ Sponsors Mr. Naseeb Ullah KakarCh: Hashmate Ali

TOTAL COST OF THE PORJECT:

Fixed Capital Cost : 24.900

Working Capital : 4.896

MEANS OF FINANCE:

Total Equity Financing : 20.121 67.53%

Total Debts Financing : 9.675 32.47%


5

LAND

A piece of land, measuring 2 acres has already been acquired by the sponsors for housing the plant and other

structures of the flour mills. The land is quite sufficient for the flour mills even if it is expanded. The cost of

the land is estimated Rs. 30, 00,000.00.

BUILDING

The cost for the mill machinery building, wheat godown, atta godown, overhead tank underground tank and

the boundary wall is worked out to be Rs. 80, 00,000.00. It is being completed with in eight to ten months.

For the details please see the building plan with the construction costs.


6

THE PLANT AND MACHINERY (RS. In 000)

………………………………………………………………………………………………Description Quantity Rate Amount………………………………………………………………………………………………

Roller Bodies 06 435 2610Plan Sifter 02 725 1450Washing Machine 01 435 435Reel Machine 01 87 87Grain Cleaning Separator(8ton) 02 116 232Scourer Machine 01 87 87Purifier 01 203 203Production Pipes 1700 ft.s (61.40) 104Lift Pipes 1100 ft.s (101.50) 112General Pipe 01 29 29Conveyor Worm 270 ft.s (1375) 371Air Lock Gate 07 8.70 61Air Lock With Cyclone 20 5.80 116Low Pressure Cyclone 4x8 Size 03 36.25 109High Pressure Cyclone 01 87 87Water Pump 02 8.70 17Packing Bins 04 4.35 17Air Preston 01 87 87Elevator 05 87 435Cyclone Small 16 4.35 70Cyclone large 04 26 104Welding Plant 02 11.60 23Battery Set 4 ways 01 73 73Battery Set 8 ways 01 145 145Electric Motors 2-75 HPs 46 870 870Pannel, Starters etc. lot 653 653Cable Various type & guage lot 653 653Complete Machinery & Electric Works,Installation and Commissioning Charges 435 435………………………………………………………………………………………………

Total Cost = 9675………………………………………………………………………………………………


7

RAW MATERIAL

The main raw material is wheat. The food Department Government of Balochistan has already sanctioned the

supply of wheat on demand from the fixed off-take of the province. As such there will be no problem in this

regard.

WATER AND POWER FACILITEIS

QESCO HT3 Power line is passing in front of the mill site. An application for the supply of 400KVA

transformer and power connection already submitted to the QESCO at Quetta. A standby generator will be an

option to use as an alternative source of power.


8

MARKET PROSPECTS

The monthly demand of atta in Quetta City is estimated to be 25000 to 75,000 bags (100). Due to Few No of

flour mills in the entire City the atta is transported from other cities to meet the demand. The sponsors do not

see any marketing problem. Further the prospective market consists of a very large area from, Quetta to

Border Ares of Afghanistan.

DEMAND AND SUPPLY GAP

A comparison of estimated supply and projected demand of wheat flour in Balochistan is given below: (in

tones)

Year Demand Supply Gap

…… ……….. ……… ……....

2005 1003880 886500 117380

2006 1054074 886500 167574

2007 1106777 886500 220277

2008 1162116 886500 275616


9

CONCLUSTION

Establishment of a flour Mill in Quetta City Provincial headquarter of the Baluchistan seems all the more

imperative in the face of fast changing scenario in the region. The population of the area itself in particular

has already into grow.

The proposed project will strengthen Government’s efforts to industrialize the areas of Balochistan especially

the Quetta city.

The sponsors of the project are technically and financially capable and competent and have al lot of

experience in this field. As such the risks for its failure are very very low.

The project is technically and financially viable and will break even just for the very first year.

The projects profit & Loss summary show that it will be earning profits form the very first year of its

operation and will pay the entire loans according to the financing Bank Repayment Schedule.


10

OBJECTIVES OF MILLING

The objectives in the milling of white flour are:

To make- as completely as possible a separation of endosperm form the bran and germ so that the flour shall

be free form bran specks and of good color and so that the palatability and digestibility of the product shall

be improved and its storage life lengthened.

To reduce the maximum amount of endosperm to flour fineness there by obtaining the maximum extraction

of white flour form the wheat and at the some time to ensure that the amount of damage to the starch

granules does not exceed the optimum.


11

WHEAT OF THE WORLD

Wheat is grown throughout the world from the borders of the arctic to near equator- although the crop is

most successful between latitude it ranges form sea level to 10,000 ft. in Kenya and 15,00 ft. in Tibet.

Cultivated varieties which are of widely differing pedigree and are grown ender varied conditions of soil and

climate show wide variations in characteristics.

WHEAT TYPE

In general way wheat’s are classified according to (1) the texture of the endosperm because this characteristic

of the grain is connected with the way the grain breaks down in milling and (2) the protein content because

the properties of the flour and its suitability for different purpose are related to this characteristic.

Hard and Soft Wheat

“Hardness” and “Softness” are milling characteristics relating to the way the endosperm breaks down. Greer

and Hinton (1950) observed that if the cut surface of hard wheat is lightly and uniformly wetted and allowed

to dry a pattern of cracks appears following the lines of the endosperm cell boundaries of the endosperm

(which resemble that in hard wheat) but passes indiscriminately through.


12

DESCRIPTION OF WORKING PROCESS

The grain discharged from the supply truck and be means of input paternoster is delivered to raw silo.

The grain cleaning procedure at first stage takes its place at the seed cleaner. The sand dust stones and other

heavy foreign particles are removed by means of vibrating sieves. Light particles and dust are separated from

the grain through aspiration. Then by means of gravity the grain go to destoner for mineral impurities

removing and after that to wild oat- (or cockle) remover.

To begin peeling process the grain is delivered to the scourer where dry first peeling of the outer shell of the

grain is executed.

Then cleaned grain is delivered to intensive humidifier where from 3 to 5% water is added.

Afterwards the wetted grain is moved by auger into the four- section silo for conditioning during 4-6 hours.

Such operation allows hardening the peripheral part of the grain.

After conditioning and second peeling but before first grinding the grain is wetted again. This operation is

occurred at the mild humidifier where only 0.5% water has been added. (Optional).

After conditional the grain reside approximately 20 minutes at the small silo which is placed the top of the

first roller mill. In run that procedure allows to harden the grain shell and sill stimulate the easiest way of

bran separation after first breaking.

First breaking take place at the first roller in roller mill #1. the grain products by mean of pneumatic transport

are delivered to the 2-section. Thus due to the sifting procedure three types of flours can be separated. Coarse

milling products follow to the next reduction system of the roller mill #1 and #2 with afterwards fraction’s

separation in the adequate section of sifter machine and so on.

The bran is the one of the largest tail fraction which needs to be processed at the finisher for increasing of the

total flour output.


13

All grain products transportation is executed by pneumatic transport which consists of fan, filter-cyclone and

cyclone dischargers.

The flour and bran are transported to the adequate silo.

The flour of each grade by auger is delivered form silo to the filling weighing section for bagging.


14

THE FINANCIAL PROJECTS

The total cost of the project is estimated to be Rs. 297, 96,000.00 inclusive of the initial working capital Rs 40, 00,000.00. the details of the cost are as under.

THE ESTIMATED PROJECT COST (Rs. 000)

ITEM SPONSORS BANKS TOTAL

Land (2 acres) 3000 3000

Buildings 8000 8000

Plant & Machinery (with erectionAnd test period running) 9675 9675

Cost of Carriage 150 150

WAPDA Connection (with

400KVA transformer) 1200 1200

Furniture & Fixtures 150 150

Preliminary & Startup Expenses 375 375

Supply Vehicles 2000 2000

Contingencies 350 350

Fixed Capital Cost 15225 9675 24900Percentage 61% 39% 100%

Initial Working Capital 4896 4896

TOTAL PROJECT COST 20121 9675 29796Equity-Debt Ratio : 67.53% 32.47% 100%


15

ASSUMPTION UNDERLYINGEARNING & EXPENSES FORECAST

Sales Estimates (Rs. 000-Qty. /tones)_______________________________________________________________________________

Year Operations 1st Year 2nd Year 3rd Year 4th Year 5th Year_______________________________________________________________________________

Capacity Utilization 50% 55% 60% 65% 70%

Production during the Year 9600 10560 11520 12480 13440

Add: moister 4-5%per ton 432 475 518 561 604

Net: quantity produced 10032 11035 12038 13041 14044

Add: opening stock of flour 0 64 70 76 82

Less: closing stock of flour(2days) 64 70 76 82 88

Quantity available for sale 9968 10965 11962 12959 13956

Sale price (Rs. 12000/-per ton 12 12 12 12 12_______________________________________________________________________________

Net Sales Value 119616 131580 143544 155508 167472_______________________________________________________________________________

Assumption and Explanation Remarks:

a) Operation times (shift/ days) 1

b) Production period (days/ annum) 300

c) Rated capacity (in ton) 19200

d) Selling price per ton (in Rs) 12000


16

Raw Material

The price of wheat is assumed at Rs. 11000/-per ton based on open market price. Annual cost for the projected period is estimated as under:

Operation Year 1st Year 2nd Year 3rd Year 4th Year 5th Year

Capacity utilization 50% 55% 60% 65% 70%

Production during the year 9600 10560 11520 12480 13440

Add: Wastage 1% per ton 96 106 116 126 136

Net quantity 9696 10666 11636 12606 13576

Purchase price (in Rs.) 11 11 11 11 11

Cost of Raw Material 106656 117326 127996 138666 149336


17

Packing Materials

50% of the annual production will be packed in the 60kg bags @ Rs 6/-per bag.

Year 1st Year 2nd Year 3rd Year 4th Year 5th Year

Production to be packed 4984 5482 5980 6478 6976No of bags 83067 91374 99680 107987 116293Cost per bag (in Rs) 6 6 6 6 6Total Cost 498 548 597 647 696

30% of the annual production will be packed in the 30kg bags @ Rs 4/-per bag


20% of the annual production will be packed in the 20kg bags @ Rs. 3/-per bag.


Total Cost of the packing Material

Plastic bags 60 kgs 498 548 597 647 696

Plastic bags 30 kgs 399 439 478 518 557

Plastic bags 20 kgs 299 329 358 388 417

Total Cost 1196 1316 1433 1553 1670


18

Manpower

Milling Staff:

Particular Number Monthly Total Pay Yearly

Miller 01 8 8 96Assistant Miller/ Fitter 01 4 4 48Electrician 01 3 3 36Skill man 01 3 3 36Washer man 01 3 3 36Helper 02 2 4 48Labour 06 3 18 216

___________________________________________________

Total = 13 516Fringe benefit @ 25% 129

=====Grand Total = 645

======The annual salaries & wages are escalated by 10% for projected period:

645 710 781 859 945

Administrative Staff:Particular Number Monthly Total Pay Yearly

Chief Executive 01 16 16 192Manager Production/Operation 01 10 10 120Manager Sales 01 6 6 72Accountant 01 4 4 48Assistants 02 3 6 72Drivers 02 3 6 72Peon 01 3 3 36Chowkidar 02 3 6 72

___________________________________________________

Total = 11 684

Fringe benefit @ 25% 171 =====

Grand Total = 855 ======

The annual salaries & wages are escalated by 10% for projected period:

855 944 1035 1139 1253


1st Year 2nd Year 3rd Year 4th Year 5th Year


19

UtilitiesPower;

Fixed Charges

Connecting Load x Rs x 200 x No. Of months = fixed charges

400 x 200 x 12 = 960

Variable charge Consumption x Hrs x No. of days = kwh

300 x 24 x 300 = 216,000 kwh

Efficiently % 50% 55% 60% 65% 70%

Kwh 1080,000 1188,000 1296,000 1404,000 1512,000

Rate (Rs) 0.68 0.68 0.68 0.68 0.68

Cost 735 808 881 954 1028

Total Cost Of Electricity

Fixed Charges 960 960 960 960 960

Variable Charges 735 808 881 954 1028

Total 1665 1768 1841 1914 1988

Other Manufacturing Overheads The overheads are estimated @ 10% of Machinery Cost which includes cost of insurance, Stores & Spares

and maintenance.

968 1065 1162 1259 1356





20

Statement of Depreciation

Particulars Amounts Contingencies Total Depreciation% Depreciation Rs

Land 3000 0 3000 0% 0Mill Building 6340 145 6485 5% 324Building (Admin Block) 1660 25 1685 5% 84Machinery 9575 Carriage +Electric connection 1350 135 11160 10% 1116

Furniture & Fixture 150 15 165 10% 17Supply Vehicles 2000 30 2030 10% 203

Total 24175 350 24525 1744

Direct Cost 1660

Administrative Expenses 84====== 1744======

Closing Inventory

The closing inventory is estimated at 3 days cost of the production. Annual cost of the inventory is estimated as under:

3 days cost of production 1127 1240 1352 1465 1577



21

Operation Expenses

General Administrative Expenses:

Salaries & wages855 941 1035 1139 1253

Printing & Stationary 30 33 36 39 42Traveling & Conveyance 100 110 120 130 140Tel. Telegraph& postage 60 66 72 78 84Power and fuel 100 110 120 130 140Entertainment expenses 50 55 60 65 70Legal & Audit fees 20 20 20 20 20Insurance & Bank charges 148 162 176 191 206Amortization of pre-op. exp. 30 30 30 30 30Depreciation 84 84 84 84 84Miscellaneous expenses 50 55 60 65 70

Total = 1527 1666 1813 1971 2139____________________________________________________________________________

Selling & Distribution Expenses:

Selling expenses are estimated at 2% of annual sales revenue.

23922631 2870 3109 3348

Financial Expenses: 1064

851 639 426 213

Amortization: preliminary startup expenses are amortized over a period of 10 years annual cost of amortization is estimated as under:

Annual cost of amortization

Pre-operation & startup expenses 375Annual Amortization @ 10 % 38

Amortization (Manufacturing) 8Amortization (Administrative) 30





22

NET INITIAL WORKING CAPITAL (Rs.ln 000)

Raw Materials 10 Days 3555 3911 4267 4623 4979

Finished Goods 3 Days 1127 1240 1352 1465 1577

Packing Materials 15 Days 60 66 72 78 84

Debtors 3 Days 1196 1315 1435 1554 1674

Cash Lump sum 25 27 30 32 35

_____________________________________________________________

5963 6559 7155 7751 8347

_____________________________________________________________

Less:

Accounts Payable @ of 3 days of annual

Requirement of raw material 1067 1174 1281 1388 1495

_______________________________________________

Net Working Capital 4896 5385 5874 6363 6852

_______________________________________________


Particular Tied up 1st Year 2nd Year 3rd Year 4th Year 5th Year period

23

Cost of Goods Sold

______________________________________________________________________________

Year of Operation 1st Year 2nd Year 3rd Year 4th Year 5th Year

_______________________________________________________________________________

Capacity utilization 50% 55% 60% 65% 70%

Production in tones 9600 10560 12520 12480 13440

Direct Cost:

Raw Material 106656 117326 127996 138666 149336

Packing Material 1196 1316 1434 1555 1674

Labor 645 710 774 839 903

Overheads:

Utilities 1695 1780 1865 1950 2035

Other overheads 968 1065 1162 1259 1356

Depreciation 1660 1660 1660 1660 1660

Amortization 8 8 8 8 8

Miscellaneous 50 55 60 65 70

_______________________________________________________

Total Cost 112878 123920 134960 146002 157042

_______________________________________________________

Add: Opening stock (2days) 0 1127 1240 1352 1465

Less: Closing Stock (3days) 1127 1240 1352 1465 1577

_______________________________________________________

Cost of Sales 111751 123807 134848 145889 156930

_______________________________________________________

Unit Cost (Per ton) 11.64 11.72 11.71 11.69 11.68


24

Forecast of Income Statement

_______________________________________________________________________________

Year of Operation 1st Year 2nd Year 3rd Year 4th Year 5th Year

_______________________________________________________________________________

Seles 119616 131580 143544 155508 167472

Cost of Goods Sold 111751 123807 134848 145889 156930

_______________________________________________________

Gross Profit 7865 7778 8696 9619 10542

Operating Expenses

Gen. & Admin Expenses 1527 1666 1813 1971 2139

Selling & Distbu. Expenses 2392 2613 2870 3109 3348

Empty Bardana Sales (2400) (2640) (2880) (3120) (3360)

______________________________________________________

Operating Profit 6346 6134 6893 7659 8415

Financial Expenses

Payment & Market up on

Bank Finance @ 11% 1064 851 639 426 213

Profit before Tax 5282 5283 6254 7233 8202

Income Tax @ 35% 1849 1849 2189 2532 2871

Net Profit after Tax 3433 3434 4065 4701 5331

Proposed Dividend @ 30% 1030 1030 1220 1410 1599

Un-Appropriated Profit 2403 2404 2845 3291 3732

Un-Appropriated Profit

Opening Balance 0 2403 2404 2845 3291

Un-Appropriated Profit


25

Carried Forward 2403 4807 5249 6136 7023

Profitated Ratio (%)

Gross Profit 6.57 5.91 6.06 6.19 6.29

Operating Profit to Sales 5.31 4.66 4.80 4.93 5.02

Pre-Tax Profit to Sales 4.42 4.02 4.80 4.93 4.80

Net-Profit to Sales 2.87 2.61 2.83 3.02 3.18

Return on Total Assets 10.57 10.32 12.69 15.06 17.62

Retrun Owners Equity 15.18 13.64 15.86 17.78 19.61

Return on Equity before Tax 23.36 20.98 24.40 27.36 30.17


26

Gross Profit to sale = Gross profit Sales

= 7865 119616

= 6.57%

Operating profit to sale = operating profit Sales

= 6346 119616

= 5.13%

Pre- Tax profit to sale = pre tax profit Sales

= 5282 119616

= 4.42%

Net profit to sale = Net profitSales

= 3433 119616

= 2.87%

Average Equity = equity at the end of the construction period + equity at the end of year12

= 20121 + 22524/2 = 213222.5

Return on Owner Equity = Net ProfitAV. Equity

= 3433 21322.5

= 15.18%

Return on total Assets = ProfitTotal Assets

= 3433 29796 + 32361

2= 10.57


X 100

X 100

X 100

X 100

X 100

X 100

27

____________________________________________________________

1st Year 2nd Year 3rd Year 4th Year 5th Year____________________________________________________________

Operating Income 6346 6134 6893 7659 8415Add Depreciation 1660 1660 1660 1660 1660

____________________________________________________________Net income 8006 7794 8553 9379 10075

Land 3000Building (75%) 6000Machinery (50%) 4838Net Working Capital 4896

Net cash inflow for 5th Year 28809=====

1. Pay Back Period:

Cash out flow-29796

Cash inflow

1. 80062. 77943. 85534. 93795. 28809

x = 3 + 5443 9379

= 3 + 0.58= 3.58 years


28

2. Discounted pay Back Period

IRR = 121Cash out flow = 29796

Discounted cash in flow:-

1. 71482. 62133. 60884. 59605. 16347

x = 4+ 4360 16347

= 4 + 0.26x = 4.26 years

3. Profitability Index

= sum of p.v of cash inflow Initial cash out flow

= 4175629796

= 1.40

4. Net present value

NPV = sum of P.V – Initial less flow= Rs 41756- Rs29796= Rs 11960


29

IRR

NPV @ 20% = Rs 3338NPV @ 25% = (742)

IRR = 20% + x

X = amount at lower rate – initial cash outflowAmount at lower rate – amount at higher rate

= Rs 33134- Rs29796 Rs 33134 -Rs29054

= 3338 4079

= 0.0409* 100x = 4.09%

IRR = 20% + 4.09%IRR = 24.09%


X 0.05

X (0.05)

30

Forecast of Balance Sheet

_______________________________________________________________________________

As on Const. Period 1st Year 2nd Year 3rd Year 4th Year 5th Year

_______________________________________________________________________________

Current Assets

Cash & Bank Balance 4896 3297 5023 4978 5377 5776

Stock 4682 5150 5618 6086 6554


Debtors 1196 1316 1435 1555 1674

________________________________________________________________

Total Current Assets 4896 9235 11555 12103 13096 14088

Fixed Assets Net 24900 23126 21382 19638 17894 16150

________________________________________________________________

Total Assets 29796 32361 32937 31741 30990 20238

Current Liabilities

Account Payable 1067 1174 1281 1388 1495

Proposed Dividend 1030 1030 1220 1410 1599

________________________________________________________________

Total 2097 2204 2501 2798 3094

Bank Finance

LMM Finance 9675 7740 5805 3870 1935 0 Running Finance 0 0 0 0 0 0

Total Bank Finance 9675 7740 5805 3870 1935 0

__________________________________________________________

Total Liabilities 9675 9837 8009 6371 4733 3094


31

Owner Equity

Paid up Capital 20121 20121 20121 20121 20121 20121

Un-Appropriated Profit 2403 4807 5249 6136 7023

__________________________________________________________

Total Equity 20121 22524 24928 25370 26257 27144

__________________________________________________________

Total LiabilitiesAnd Equity 29796 32361 32937 31741 30990 30238

===================================================


32

Forecast statement of Changes in financial Position

_______________________________________________________________________________Year Ending End of cost 1st Year 2nd Year 3rd Year 4th Year5th Year

Period_______________________________________________________________________________

Cash Flow from Operating Activities

Profit before taxation 0 5282 5283 6254 7233 8202

Depreciation (Total) 0 1744 1744 1744 1744 1744

Amortization 0 38 38 38 38 38

__________________________________________________________

Operating Profit before

Working Capital changes 0 7064 7065 8036 9015 9984

(Increase)/Decrease in

Current Assets 0 (4339) (2320) (548) (933) (992)

(Decrease)/Increase in Current Liabilities

(Other than Bank Borrowing) 0 2097 107 297 297 296

__________________________________________________________

Cash Generated

From Operating 0 4822 4832 7785 8319 9984

Income Tax paid 0 1849 1849 2189 2532 2871

(Decrease) in Bank

Borrowing 9675 (1935) (1935) (1935) (1935) (1935)

(Inerease in Paid up Capital 20121 0 0 0 0 0

_________________________________________________________________

Net Cash from (Used in

Operating Activities) 29796 4908 4938 7531 7725 8355


33

Cash Flow from Investing Activities

Fixed Capital Expenditures 24900 0 0 0 0 0

Advance & other Invetsments 0 0 0 0 0 0

________________________________________________________________

Net Cash used in

Investing Activities 24900 0 0 0 0 0

Cash Flows from Financinq Activities

Dividend Paid 0 0 1030 1030 1220 1440

________________________________________________________________

Net Cash used in

Financing Activities 0 0 1030 1030 1220 1440

Net (Decrease) in

Cash & Bank Balance 4896 (1599) 1726 (45) 399 399

Cash & Bank Balance 0 4896 3297 5023 4978 5377

______________________________________________________________

Cash & Bank Balance

At Closing 4896 3297 5023 4878 5377 5776

_______________________________________________________________


34

Economic Evolution

Contribution to the Gross National Product:__________________________________________________________________________________

1st Year 2nd Year 3rd Year 4th Year 5th Year__________________________________________________________________________________

Value of Production 119616 131580 143544 155508 167472

Less: Intermediate Inputs

Raw Material 106656 117326 127996 138666 14933


Water, Power & Fuel 1795 1878 1961 2044 2128

Other Mfg. Overheads 968 1065 1162 1259 1350

Printing & Stationary 30 33 36 39 42

Traveling & Conveyance 100 110 120 130 140

Tel. Tlgph. &Postage 60 66 72 78 84

Entertainment Expenses 50 55 60 65 70

Legal & Audit Fee 20 22 24 26 28

Markup on Bank Borrowing 1064 581 639 426 213

Insurance Expenses 148 162 176 191 2

Selling & Distb. Expenses 2392 2631 2870 3109 3348

Miscellaneous Expenses 50 55 60 65 70

__________________________________________________________________________________Total Intermediate Outputs 114529 125515 136609 147651 158691__________________________________________________________________________________Value Added 5087 6065 6935 7857 8781Value Added% 4.25% 4.61% 4.83% 5.05% 5.24%__________________________________________________________________________________


35

Break Even Analysis

Operational Year 1:

__________________________________________________________________________________

Item Total Fixed Variable Fixed% Var.%__________________________________________________________________________________

Raw Material 106656 0 106656 0 100%

Packing Material 1196 0 1196 0 100%

Salaries and Wages 645 387 258 60% 40%

Depreciation 1660 1660 0 100% 0%

Amortization 8 8 0 100% 0%

Utilities 1695 508 1187 30% 70%

Other Mfg. Overheads 968 468 500 48% 52%

Markup on BankLong Term Loan 1064 1064 0 100% 0%Miscellaneous Expenses 50 18 32 36% 64%

Markup on Running Finance 0 0 0 0% 0%

Gen. Administrative Expenses 1527 855 672 56% 44%

Selling & Distb. Expenses 2392 0 2392 0% 100%

__________________________________________________________________________________

117891 4998 112893__________________________________________________________________________________

Net Sales @ 50% Capacity : 119616

Total Expenses @ 50% : 117891

Break-Even Sales : Fixed Expenses/(1-Variable Expenses/ Sales)

= 4998/(1-112893/119616)

= 83300

Capacity Utilization = 83300*50/119616

= 34.82


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Flour Mill Project

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